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Search Capital

8 Pages Posted: 29 Feb 2012  

Carlos Carrillo-Tudela

University of Leicester; IZA Institute of Labor Economics

Eric Smith

University of Essex - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 28, 2012

Abstract

We construct a simple equilibrium search model in which workers accumulate information about previously met employment contacts. We term the latter search capital. Here search capital (partially) insures workers against adverse shocks. The model provides a theory of job-to-job transitions that are associated with voluntary or involuntary mobility and with wage rises or wage cuts. It also shows why low wage and younger workers are associated with a higher probability of becoming unemployed.

Keywords: search capital, turnover, wage cuts

JEL Classification: J620, J630, J640

Suggested Citation

Carrillo-Tudela, Carlos and Smith, Eric, Search Capital (February 28, 2012). CESifo Working Paper Series No. 3741. Available at SSRN: https://ssrn.com/abstract=2012203

Carlos Carrillo-Tudela (Contact Author)

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Eric Smith

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

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